Iceland takes a cold, hard look at TACV

Apart from the fact that they are both islands in the Atlantic, Iceland and Cabo Verde (Cape Verde in English) would seem to have very little in common.
Their respective national airlines are also very different. Icelandair is a flourishing carrier, whose size belies its country’s small population and has carved out a niche for itself over several decades by using its Keflavik hub as a staging post for transatlantic services. Iceland has also become an increasingly popular tourist destination in its own right.
Cape Verde, while it has a promising inbound tourist trade, has an airline that is burdened with debt and with – in summer 2017 – had just a single operational aircraft, a Boeing 757-200.
The Cabo Verde Government is seeking to reinvigorate and eventually privatise the state-owned national carrier, TACV, and has brought in Loftleidir Icelandic, part of the Icelandair Group, as its strategic partner to handle the project.
Loftleidir, which acts as a capacity provider within the group and handles charter, and aircraft, crew, maintenance and insurance (ACMI – wet lease) operations for Icelandair, has been given a 12-month management contract, renewable each year, to oversee the necessary changes.
Its roles at TACV will include network planning, marketing, sales and distribution planning.
“The government of Cabo Verde is very pleased to have negotiated this mutually beneficial agreement with Loftleidir Icelandic, leading to the restructuring and privatisation of our national airline,” said José Gonçalves, the islands’ minister of economy and employment, who has responsibility for the air transport sector.
Loftleidir will coordinate the work of several companies within the Icelandair Group to implement a new business plan that has been approved by the Cabo Verde Government and TACV’s board. This includes implementing the re-defined mission of the company to become an airline that will connect four continents – North and South America, Africa and Europe.
The two carriers have a previous connection: for decades, Icelandair provided ground support to TACV when it operated into Boston’s Logan Airport.
A new TACV CEO, Mario Chaves, has been appointed, together with several specialists to help in the restructuring of the airline; Loftleidir will also post some permanent staff to the archipelago off the West African coast.
“TACV is facing many challenges, including debt issues and infrastructure problems,” said a Loftleidir spokesman. “We believe there is great opportunity for improvement and subsequent success of the airline.
“We see the unique geographical position of Cabo Verde as the main opportunity for the future TACV network. We also feel that the opportunities for tourism in Cabo Verde will support the growth of the airline and, in equal measure, that the growth of the airline will stimulate tourism growth.” One major aim is to establish Cabo Verde as a year-round tourist destination.
“Loftleidir has already delivered two Boeing 757-200s on wet lease to TACV and it is foreseen that additional aircraft will be supplied under dry lease contracts in the future.”
TACV operates scheduled services to destinations including Providence in the US, Fortaleza and Recife in Brazil, Paris and Amsterdam in Europe, plus Dakar and Bissau in Senegal and Guinea-Bissau respectively. The short-haul African services were operated with an ATR 72 turboprop.
As one of the first steps in its restructuring, it discontinued all inter-island operations in the Cabo Verde archipelago in August 2017, with Binter Cabo Verde taking over those duties with schedules to link into TACV’s international services.
TACV’s future seeks to make use of its home base’s strategic position as a hub for mid-Atlantic operations. With this in mind, Loftleidir will draw on the Icelandair Group’s successful experience in building a hub-and-spoke system to support an air hub at Cabo Verde’s Amilcar Cabral International Airport.